Over its 40-year history, the Opportunity Funding Corporation (OFC) has played a significant role in developing minority businesses in the U.S., in particular strategies for attracting capital, as well as nurturing the creation of a new class of professional African American entrepreneurs.
- The OFC has provided deposits and technical assistance, and raised capital, for minority banks and savings and loan associations.
- It has helped to organize and directly invested in venture capital firms, including SYNCOM, which provided critical venture funding to BET and Radio One.
- It has explored a range of strategies to test, evaluate, and determine best practices for promoting investment in the minority community.
The Opportunity Funding Corporation was the brainchild of John “Jack” Glouster, an Atlanta based academician and banker. He skillfully collaborated with Loretta Argrett, a respected Washington, DC tax lawyer, in conceiving an organization that would promote entrepreneurship within the African American/minority community.
Early History
In 1970, OFC was established as a non profit, tax exempt corporation with a $7.4 million grant from the Office of Economic Opportunity. OFC was a new and daring idea: a corporation to test ways of attracting scarce capital into America's ghettos, barrios and impoverished rural communities. OFC was an ideal expression of the black capitalism initiatives embraced by President Nixon, Secretary of Commerce Stans and Director of the Ofice of Economic Opportunity, Donald Rumsfield.
John Gloster was recruited from the National Urban Coalition to serve as OFC's first president. Gloster then recruited Robert Kemp, a senior manager in the Nixon Administration, to manage the program. Kemp, in turn, recruited Harvard M.B.A. Herbert Wilkins, Sr.
OFC became operational with the mission “to address the capital gap: debt and equity,” with a primary focus on investments. It engaged in a number of demonstration initiatives to attract capital to poor communities, and to train and advise local management.
Non-Profit Status
In 1978, Jimmy Carter made it possible for the OFC to move from a government controlled organization to a private non-profit entity. Glouster, Hertz and Kemp formed a Board of Governors, which included Jesse Hill, Jr. the Chairman of Atlanta Life Insurance Company, and a major figure in the civil rights movement. Lt. General Arthur J. Gregg, U. S. Army, Retired, a veteran Logistician with the Army and the Joint Chiefs of Staff; and Major General Lucius Theus, U.S. Air Force, retired, a Tuskegee Airman, and Assistant Comptroller at Bendix Corporation joined the effort.
Expanding Investments
OFC moved rapidly to expand investments in the minority community by forming a for profit entity - Opportunity Funding Corporation, Inc. OFC, Inc. then formed two venture capital firms to attract additional capital and to invest in a wide range of minority businesses. Both venture capital firms attracted capital from government and private sources, and be came generators of capital.
The first of these venture capital firms, Syndicated Communications, Inc. (SYNCOM), was led by Herb Wilkins, and focused on investment in the communications and media sectors. It has invested in more than 110 companies providing early stage capital and management advice.
These companies included the highly successful District Cable, Black Enterprise Television (BET) and Radio One. Today the SYNCOM portfolio of companies has a value in excess of $300 million with investments in companies such as World Space and Iridium. The company has been acquired by Herb Wilkins, Sr.
The second of OFC, Inc.’s .venture capital firms is Fulcrum Venture Capital Corporation (FVCC), and was led by Bob Kemp and later Brian Argrett. Unlike SYMCOM focused investments, Fulcrum invested in a very wide range of minority businesses from transportation and communications to publications and manufacturing. Like SYNCOM, however, Fulcrum attracted government and private capital to increase its pool of investment dollars. Radio One is the only nationally recognized name in the Fulcrum portfolio of companies, but it has invested in a large number of small companies, and its management team has been very active as coaches and advisors. Seventy five percent of Fulcrum's equity continues to be owned by OFC, Inc., and General Gregg is it Chairman.
